Law and Disorder: Stoel Rives Eliminates 17 Positions – Trend Affecting Half of All U.S. Law Firms

Mallet Being Hit On Dollar Bundle In Courtroom
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Not even lawyers can catch a break in this economic environment. Stoel Rives LLP, a Portland, Oregon-based law firm that employs nearly 800 people across its 10 U.S. offices, said it will jettison 17 administrative staff positions as it looks to revamp operations.

We’re currently in the midst of implementing our strategic plan, which focuses on proactively modernizing the way we run our firm,” said Managing Partner James Torgerson in an internal memo. “Updating our staffing model to meet the demands of today’s legal market reality is part of that, so we’ve laid off 17 of our administrative staff.”

In 2016, Stoel Rives saw its gross revenue increase slightly to $215.5 million. To help boost revenue in 2017, the firm hired two partners to court startup businesses as clients.

Stoel Rivers is hardly unique among American law firms. In June, San Francisco-based Sedgwick eliminated an unspecified number of employees after the departure of at least eight partners. The loss of the company’s Dallas office, combined with lawyers leaving the New Jersey office earlier in 2017, accounted for 20% of Sedgewick’s gross revenue.

Meanwhile, in May, Seyfarth Shaw LLP, a Chicago-based law firm with more than 900 attorneys in the U.S., London, Shanghai, Melbourne, and Sydney, laid off at least 40 lawyers and administrators after it reported weak numbers in the first quarter of 2017. The prior year, the company’s gross revenue increased six percent to $623.5 million, while profits per partners rose three percent to $1.05 million.

This is a trend that is impacting almost half of all law firms in the U.S. According to a report, 46% of the law firms with fewer than 250 lawyers have cut staff within the last year to increase profitability. Meanwhile, 54% of firms with more than 200 lawyers have eliminated positions to improve their bottom line.

Moreover, cutting administrative and staff positions has become one of the more successful ways for law firms to improve profitability. More than 70% of managing partners said reducing staff helped increase said metric. More labor-intensive ways of investing in business development was only helping in enhancing the bottom line 29% of the time. Going forward, 89% of firms said fewer support staff would be a permanent trend.

Sources:

Stoel Rives, a ‘Proactively Modernizing’ Firm, Lays Off Staff,” The American Lawyer, July 26, 2017.

Law Firms in Transition 2017,” Altman Weil, Inc., last accessed July 28, 2017.

As Litigators Depart, Sedgwick Sheds Staffers,” The American Lawyer, June 20, 2017.

Mass Layoffs at Seyfarth Shaw Hit Lawyers, Staff,” The American Lawyer, May 16, 2017.

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